It is a, and I consider my words, a real scandal that such articles are written in quality newspapers like "De Tijd" and "De Standaard". Using publicly available statistics (http://statbel.fgov.be/nl/modules/publications/statistiques/arbeidsmarkt_levensomstandigheden/Fiscale_inkomens.jsp, http://statbel.fgov.be/nl/modules/publications/statistiques/economie/Verkoop_onroerende_goederen.jsp) household incomes and housing prices I was able to make the following graph which shows how the affordability of houses dramaticly decreased. This graph shows the ratio between the average house price and the average net household income. The graph can also be read as the number of years an average Belgian family has to work to pay his house without spending on living costs.
This ratio just exploded from 2,63 back in 1993 to 6,4 in 2007! As you can see, the real explosion happened after 2004. Between 2004 and 2005, the average house became an average year income more expensive. What happened between 2004 and 2005? Three major things which formed a deadly cocktail for "Jan Modaal" or "Jean Normale" (aka John Doe):
- In Flanders, a revision of the "spatial structure plan" came in effect which decreased the number of parcels available for home construction
- A fiscal amnesty operation which brought more 5,7 Miljard Euro back to Belgium
- And, last but not least, low interest rates.....
Following graph shows the percentual increase of the house prices in Flanders and Walloon. The figure shows clearly that, as from 2004, house prices increase more in Flanders than in Walloon. As the low interest rates were a driver between the house prices in both regions the difference in increase should come from the "spatial structure plan" or .... there was more black money in Flanders :-) The Fiscal Amnesty came in effect on 16/01/2004. The degree to which property in Flanders outperformed property in Walloon, especially in 2004 is just too coincidental.
However, there are limits and average house prices seem to have reached these limits in Q3 2008! Since then there has been a decrease during 3 quarters but, last quarter property prices regained. A "shoulders - headers - shoulders" pattern that indicates a trend change? The future will tell!